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'One less Cordray disciple in the Swamp': Comments of the week

ByVictoria Finkle
May 23, 2019 9:50 PM

Readers weigh in on the role of the Financial Accounting Standards Board, consider personnel changes at the Consumer Financial Protection Bureau, debate the viability of public banks and more.

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Richard Cordray, Democratic nominee for governor of Ohio, applauds as former U.S. President Barack Obama, not pictured, speaks during a campaign rally in Cleveland, Ohio, U.S., on Thursday, Sept. 13, 2018. Cordray is a former U.S. President Barack Obama appointee who was director of the Consumer Financial Protection Bureau, the federal watchdog agency now being overhauled by Trump's administration. Photographer: Allison Farrand/Bloomberg
Allison Farrand/Bloomberg
On news that a top Consumer Financial Protection Bureau official, hired under former Director Richard Cordray, will be leaving the agency:

"One less Cordray disciple in the Swamp is a good thing."

Related: CFPB's assistant director for enforcement resigns: Sources
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On an argument that the Financial Accounting Standards Board deliberates carefully in setting new guidelines for banks, despite strong criticisms of the new current expected credit loss method:

"Amen, and while we are at it, consider the risk we bankers take in asking congress people to intervene. The government as a standard setting body is too much of a nightmare to contemplate, but that is the slippery slope some wish to step on."

Related: Slamming FASB misses the point
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Another reader weighs in on the debate over FASB and the standard-setting process:

"Fair or not, every banker I know sees FASB as cloistered ideologues obsessed with imposing mark-to-market accounting regardless of its impact. During the recession, mark-to-market caused massive accounting losses that mostly didn't happen because no banker will sell a good loan when the secondary market is disrupted. With respect to loans, at least, the gist of this article will sway no one as long as FASB appears to be oblivious to the impact of its rules."

Related: Slamming FASB misses the point
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A third reader comments on FASB's authority and the impact of changes like CECL:

"One thing that has not been mentioned is Washington's consistent effort to implement any new or revised regulation with a 'one-size-fits-all' mentality. FASB may be great in theory, but for smaller, traditional community banks FASB is a life-changing and costly system. CECL guarantees such a result, without being able to demonstrate any consumer or regulatory improvement over the incurred loss method."

Related: Slamming FASB misses the point
New York City
The Empire State building stands in the midtown Manhattan skyline seen in this aerial photograph taken in New York, U.S., on Tuesday, Dec. 3, 2013. U.S. stocks declined a fifth day, sending the Standard & Poor’s 500 Index to a two-week low, after improving economic data boosted bets the Federal Reserve will curb its monthly bond purchases sooner than estimated. Photographer: Ron Antonelli/Bloomberg
Bloomberg News
Activists in New York City are pursuing the creation of a public bank, despite recent setbacks in Los Angeles, Seattle and elsewhere:

"So the reason L.A. and Seattle didn't open a public bank was because proponents did a poor job selling the idea that a public bank was necessary? Hardly. Even L.A. and Seattle voters know you can't put lipstick on pig and expect to win a beauty pageant."

Related: In New York, growing support for a public bank
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Another reader considers the prospect of a public bank in New York:

"Some ideas are just so obviously awful... the usual suspects cannot keep themselves from pursuing them."

Related: In New York, growing support for a public bank
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On an argument that a National Credit Union Administration plan to raise the appraisal threshold on commercial real estate loans won't cause harm:

"Perfect example why banks and anyone who enjoys a fair playing field, hate credit unions. This is CUs attempt to move into the commercial real estate area which really shows how they are trying to be banks without the same level of regulation and without paying taxes."

Related: NCUA appraisal plan is far from risky
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PayPal Holdings Inc. signage is displayed outside the company's headquarters in San Jose, California, U.S., on Tuesday, Jan. 24, 2017. PayPal Holdings Inc. is scheduled to release earnings figures on January 26. Photographer: David Paul Morris/Bloomberg
David Paul Morris/Bloomberg
On a look at why consumer bank accounts remain so sticky:

"Because clearing still takes 7 days for most banks, and their digital offerings are built on top of this, and often outsourced, the bank itself has become necessary but irrelevant. I move money into paypal and amazon and effectively use them as a bank, only defaulting bank to a real bank when I have to process checks, and credit cards for everything else, paid from the bank."

Related: What does it take to get consumers to switch banks?
Victoria Finkle
BankThink Editor , American Banker
CECL Accounting methods Accounting standards Consumer banking Commercial real estate lending Appraisals Richard Cordray FASB NCUA CFPB News & Analysis
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